Defendants Stay Court Proceedings Relying On Agreement To Which They Were Not a Party

Defendants Stay Court Proceedings by Relying on an Arbitration Agreement to Which They were Not a Party

Baker McKenzie review the 2017 Singapore High Court decision in Gulf Hibiscus Ltd v Rex International Holding Ltd & Anor [2017] SGHC 210, where the Court reaffirmed that it had the inherent power to stay court proceedings in favour of arbitration, even where the party seeking the stay is not a party to relevant arbitration agreement and arbitration proceedings have not yet been commenced.

The Court stated [59]:

“The power to order a case management stay is part of the court’s own inherent and immediate powers to control proceedings before it. While the existence of an arbitration agreement between the parties would give strong grounds for a stay of court proceedings taken in contravention of that agreement, there are already express statutory provisions conferring the power to stay under s 6 of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“the IAA”) or s 6 of the Arbitration Act (Cap 10, 2002 Rev Ed) (“the AA”) (for domestic arbitrations). Instead, the inherent power is invoked to deal with situations without an express agreement between the relevant parties to the court proceedings. Furthermore, the jurisprudential basis for the exercise of the power to stay in the absence of an agreement is the wider need to control and manage proceedings between the parties for a fair and efficient administration of justice; it is not predicated on holding parties to any agreement – the absence of such an agreement is therefore irrelevant.”

About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

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